Become Debt Free, Right Now!

One financial goal that we may all be working towards is to become debt free.  Whether you have $100,000 in student loan debt or you have $10,000 in credit card debt you probably want to pay off your debts as soon as possible.

There are several advantages to having debt such as building a good credit score and learning to become financially responsible.  Getting something that you want and paying for it later (i.e. a four year university education) is another great advantage of having debt.  However there are also several disadvantages to having debt such as paying costly interest charges, and the possibility of not being able to afford the repayments every month.

I recently received an email from our good friends at Adaptu which was full of great savings tips.  If you do not yet manage your money, your budget, your investments, your debt, and your rewards programs with Adaptu then I suggest that you sign up ASAP.  You will be added to their mailing list so that you can also receive regular emails with helpful money savings tips.  After all, the more money we save on our monthly expenses the more money we can allocate towards paying off our debts.

Here are 4 tips to help you save money and pay off your debts:

1. Avoid All Fees.  Whether it’s a late fee for returning a movie rental after the cut-off time or it’s paying a bank fee for extra services you should try to avoid paying all extra fees at all costs.  I have said it before and I will say it again, I will walk 10 blocks in the rain before I pay a fee to withdraw money from another bank’s ATM.

2. Set a Budget.  You will never save money if you constantly spend all of your money.  This is why having a budget is so important when we are trying to save money and pay off our debts.  Along with your monthly living costs, a portion of your personal income should be allocated towards paying off your debt and saving money. However you have to set priorities.  If your current priority is paying off debt then you should allocate the most amount of your money towards your debt repayments.

3. Have a Debt Repayment Plan.  It’s not enough to have becoming debt free as a financial goal; you have to set a plan in motion so that you can start working towards achieving your debt free goal. Allocating debt repayments into your budget will help you set a target date towards becoming debt free.  You should focus on paying off your most expensive debt first (i.e. the debt with the highest interest rate) then you should focus on the debt with the highest outstanding balance.

4. Simplify Everything. One of the biggest mistakes that people make in life is that we always complicate things when they can actually be very simple.  If you are focusing on becoming debt free then make some sacrifices in your personal spending and allocate as much money as you can towards your debt repayment.  Tracking your progress can be very simple if you use one money management website.  Don’t make your debt repayment plan harder than it has to be, just set up pre authorized transfers from your checking account to your debts, spend less money, and track your progress.  You will be debt free in no time.

Photo by ImagesofMoney

Kristina Tahnyak

Tahnya is a Certified Financial Planner and former Investment Advisor turned marketing and communications professional She holds a degree from Concordia University, is debt free and currently works in the field of digital marketing.